Ing. Karel Mls, Ph.D.

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Management Support Systems 12011/12

• Ing. Karel Mls, Ph.D.

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• Efraim Turban and Jay E. Aronson Decision
  Support Systems and Intelligent Systems
• 6th edition
• Prentice Hall, Upper Saddle River, NJ, 2001

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CHAPTER 1

• Management Support Systems

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DECISION MAKING AND COMPUTERIZED SUPPORT

• Management Support Systems (MSS)Computerized
  technologies
• Objectives
• Support managerial work
• Support decision making

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Management Support SystemsAn Overview

• Emerging and Advanced Computer Technologies for
  Supporting Managerial Problem Solution
• Changing Organizational Structure
• Enabling Business Transformation
• Changing Management Methods

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Managers and Decision MakingWhy Computerized
Support?

• Competition
• Speed
• The MANAGERS are always responsible for decision
  making

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The Nature of Managers Work Make Decisions!
Mintzberg (1980) Roles (Table 1.1)

• Interpersonal
• Figurehead
• Leader
• Liason
• Informational
• Monitor
• Disseminator
• Spokesperson
• Decisional
• Entrepreneur
• Disturbance Handler
• Resource Allocator
• Negotiator
• Managers need information and use computers to
  support decision making

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Managerial Decision Making and Information
Systems

• Management is a process by which organizational
  goals are achieved through the use of resources
• Resources Inputs
• Goal Attainment Output
• Measuring Success
• Productivity Outputs / Inputs

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Management

• Management is decision making
• The manager is a decision maker
• Now fast changing, complex environment
• Trial-and-error not a great approach
• Factors affecting decision making (Figure 1.1)

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Managers and Computerized Support

• Information Technology vital to the business
• Support technologies extensively implemented

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• Computer Applications Evolving
• from TPS and MIS
• to Proactive Applications (DSS)
• New modern management tools in
• Data access
• Online analytical processing (OLAP)
• Internet / Intranet / Web
• for decision support

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Need for Computerized Decision Support and the
Supporting Technologies

• Speedy computations
• Overcome cognitive limits in processing and
  storage
• Cognitive limits may restrict an individuals
  problem-solving capability
• Cost reduction
• Technical support
• Quality support
• Competitive edge

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Decision Support Technologies

• Management Support Systems (MSS)
• Decision Support Systems (DSS)
• Group Support Systems (GSS)
• Enterprise (Executive) Information Systems (EIS)
• Enterprise Resource Planning (ERP) and
  Supply-Chain Management (SCM)
• Knowledge Management Systems
• Expert Systems (ES)
• Artificial Neural Networks (ANN)
• Hybrid Support Systems
• Intelligent DSS

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Framework for Decision Support

• Figure 1.2 (Gorry and Scott Morton, 1971)
• Combination of
• Simon (1977) Taxonomy
• Anthony (1965) Taxonomy

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Decision Support Framework
Type of Control
Operational Managerial Strategic
Control Control Control
Type of Decision
Structured Semistructured Unstructured
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Decision Making Along a Continuum (Simon)
Highly Unstructured (Nonprogrammed) Decisions
Highly Structured (Programmed) Decisions
Semistructured Decisions
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Three Phase Decision-making Process (Simon)

• Intelligence--searching for conditions that call
  for decisions
• Design--inventing, developing, and analyzing
  possible courses of action
• Choice--selecting a course of action from those
  available

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• Unstructured problem has no structured phases
• Semistructured problem has some (or some parts
  with) structured phases
• Structured problem has all structured phases
• Procedures for obtaining the best solution are
  known
• Objectives are clearly defined
• Management support systems can be useful

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• Unstructured problems often solved with human
  intuition
• Semistructured problems in between
• Solve with standard solution procedures and human
  judgment
• A Decision Support System can help managers
  understand problems in addition to providing
  solutions
• Goal of DSS Increase the effectiveness of
  decision making

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Anthonys Taxonomy (1965)

• Encompass ALL managerial activities
• Strategic planning
• Management control
• Operational control
• Combine Anthonys and Simons Taxonomies
• DSS for semistructured and unstructured decisions
• MIS and management science approaches
  insufficient

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Computer Support for Structured Decisions

• Since the 1960s
• Repetitive in nature
• High level of structure
• Can abstract and analyze them, and classify them
  into prototypes
• Solve with quantitative formulas or models
• Management Science (MS) / Operations Research
  (OR)

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Management Science

• Scientific approach to automate managerial
  decision making1. Define problem2. Classify
  problem 3. Construct mathematical model4.
  Find and evaluate potential solutions5. Choose
  and recommend a solutionModeling Transforming
  the real-world problem into an appropriate
  prototype structure

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Decision Support Systems Concept

• DSS are interactive computer-based systems, which
  help decision makers utilize data and models to
  solve unstructured problems (Scott Morton,
  1971).
• Decision support systems couple the intellectual
  resources of individuals with the capabilities of
  the computer to improve the quality of decisions.
  It is a computer-based support system for
  management decision makers who deal with
  semi-structured problems (Keen and Scott Morton,
  1978). Content-free expression
• There is no universally accepted definition of
  DSS
• Umbrella term vs. narrow definition (specific
  technology)

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Major DSS Characteristics

• (DSS In Action 1.5 Houston Minerals Case)
• Initial risk analysis (management science)
• Model scrutiny using experience, judgment, and
  intuition
• Initial model mathematically correct, but
  incomplete
• DSS provided very quick analysis
• DSS flexible and responsive. Allows managerial
  intuition and judgment

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Why Use DSS?

• Perceived benefits
• decision quality
• improved communication
• cost reduction
• increased productivity
• time savings
• improved customer and employee satisfaction

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Major Reasons

• Unstable economy
• Difficulty in tracking numerous business
  objectives
• Increased competition
• Electronic commerce
• Existing systems did not support decision making
• IS Department is too busy
• Special analysis
• Need accurate information
• Organizational winner
• New or timely information needed
• Mandated by management
• Cost reductions
• End-user computing

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Group Support Systems (GSS)

• Decisions often made by groups
• Supports groupwork, anytime, anyplace
• Also called
• Groupware
• Electronic meeting systems
• Collaborative computing

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Executive Information (Support) Systems (EIS, ESS)

• Organizational view
• Information needs of executives / managers
• Customized user seductive interface
• Timely and effective tracking and control
• Drill down
• Filter, compress, and track critical data /
  information
• Identify problems / opportunities

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EIS

• Mid-1980s - large corporations
• Now global
• Affordable to smaller companies
• Serves managers as enterprise-wide systems

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Expert Systems (ES)

• Experts solve complex problems
• Experts have specific knowledge and experience
• Expert systems mimic human experts
• ES performance comparable to or better than
  experts in a specialized and usually narrow
  problem area

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Intelligent Agents

• Help automate various tasks
• Increase productivity and quality
• Learn how you work

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Artificial Neural Systems

• Artificial Neural Networks (ANN)
• Mathematical models of the human brain
• ANN learn patterns in data
• ANN can work with partial, incomplete, or inexact
  information

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Knowledge Management Systems (KMS)

• Capture and reuse knowledge at the organizational
  level
• Knowledge repository for storage
• Organizational impacts can be dramatic

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ERP and SCM

• Enterprise Resource Planning (Management)
• Supply Chain Management including Customer
  Resource Management (CRM)
• Enterprise-level cost cutters

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Cutting Edge Intelligent Systems

• Genetic AlgorithmsWork in an evolutionary
  fashion
• Fuzzy LogicContinuous logic (NOT just True /
  False)
• Intelligent AgentsIn search engines, e-mail,
  electronic commerce

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Hybrid Support Systems

• Combines MSS technologies
• Use strengths of each
• Goal successful solution of the managerial
  problem
• Tools support each other
• Tools can add intelligence to traditional MSS

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Computerized Decision Aids Evolution and
Attributes

• Computerized procedures development aids decision
  making (Table 1.2)
• DSS supports specific questions (Table 1.3)

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Evolutionary View of CBIS

• 1. Time Sequence
• mid-1950s Transaction Processing Systems (TPS)
• 1960s MIS
• 1970s Office Automation Systems DSS
• 1980s DSS Expanded Commercial applications of
  expert systems Executive Information Systems
• 1990s Group Support Systems Neural Computing
  Integrated, hybrid computer systems

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• 2. Computer evolved over time
• 3. Systemic linkages in how each system processes
  data into information Relationship among these
  and other technologies (Figure 1.3)

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Relationship Among Technologies

• Each technology unique
• Technologies interrelated
• Each supports some aspects of managerial decision
  making
• Ever expanding role of information technology
  improving management
• Interrelationship and coordination evolving

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Summary

• DSS has many definitions
• Complexity of managerial decision making is
  increasing
• Computer support for managerial decision making
• Several MSS technologies including hybrids